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Gender Reveal (cake) Externalities


Warning: This post is a little sad, but then I have a couple of comical stories at the end.


Gender reveal parties. They sound innocent. Have a cake, slice into it, if the cake is pink, you’re having a girl! If it’s blue, a boy! Or maybe you have a balloon filled with confetti, if the confetti is pink... you got the picture.


Over the last 5 to 10 years these parties have gotten increasingly more popular. And people have gotten more innovative about how to “reveal” to themselves and their family/friends what gender baby they are having.


I’m sure you’ve seen a YouTube video, or 10, of an especially creative one. Unfortunately, as people have attempted to get more and more unique, things have taken a turn for the worse.


Just last week, a firefighter died after some pirotechnics that were supposed to shoot out the appropriate gender color sparked a fire in Southern California. Super sad. (NYTimes article)


Unfortunately, this isn’t the first fire that’s been started, another one occurred in Arizona a couple years ago — again from a gender reveal. (NYTimes article)


The worst story involved the accidental building of a pipe bomb. It ended very tragically.


What does this have to do with economics? Externalities. As I’ve written about before, externalities occur when the actions of a party (consumer or producer) affect someone else (a bystander) who was not involved at all.


Let’s take the fire in California last week. The tragedy was unexpected for everyo